ThredUP Co-Founder and CEO James Reinhart speaks onstage during TechCrunch Disrupt San Francisco 2019 at the Moscone Convention Center on October 2, 2019 in San Francisco, California.
Kimberly White | Getty Images Entertainment | fake images
Sales of used clothing are booming online, ThredUp CEO James Reinhart told CNBC’s Squawk Alley on Friday, just before the company’s shares began trading on the Nasdaq Global Select Market.
The company announced Thursday night the price of its initial public offering of its Class A common shares at $ 14 per share, on the high side of estimates, and sold 12 million shares to raise $ 168 million.
The shares were up nearly 30% in early trading on Friday.
“I think this is a category that is big, it’s getting bigger,” Reinhart told CNBC.
Nine banks, led by Goldman Sachs, Morgan Stanley and Barclays are participating in the deal.
Based in Oakland, California, ThredUp is an online resale marketplace where consumers can buy and sell second-hand clothing, shoes, and accessories. The website features around 2.4 million listings for more than 35,000 brands at any one time.
The second-hand market is estimated to be worth $ 28 billion, according to ThredUp’s annual report. The company expects it to rise to $ 64 billion by 2024 as more consumers switch to used clothing due to fast-fashion environmental concerns. The coronavirus pandemic has also fueled growth, as consumers seek to save and earn money by buying fashion at lower prices or selling clothing on the company’s platform.
Last year, the company generated $ 186 million in revenue, a 14% increase from the previous year.
The number of active buyers grew 24% last year, Reinhart told CNBC. Additionally, 77% of your product offering comes from regular sellers, that is, sellers who have previously sold on ThredUp.
“It’s one of the unique value propositions we’ve been able to offer, so vendors are approaching us organically and we’ve never had a problem sourcing supplies,” he said.
When asked about post-pandemic trends and whether shoppers will continue to seek resale as people return to buy in person, Reinhart is unfazed by his confidence in the platform for years to come.
“I think we will still be in recession [after the pandemic], and there are still some community members who are suffering, so ThredUp offers great brands and great prices, “he said, adding that the stimulus controls will also push people to buy used.
ThredUp has around 21 partnerships with retailers like Walmart to help brands expand their product offerings.
“It’s about how they can get their customers to buy more sustainably,” he said. “It actually speaks to the breadth of the show that we created, and I think it heralds a bright future for reselling and that work on it.”